In the next few months, we will be taking a closer look at each of the trends we predicted for the logistics industry in 2020. When most people think about logistics trends, they think about the rise of e-commerce and the effects on the customers. Today, we’re going to focus on a more behind-the-scenes element of the logistics industry—human resources and the effects of rapid growth on that aspect of the business.
It would be easy to say that as e-commerce rises and logistics companies must hire more people, that it’s only natural for more HR issues to develop. But to best understand the issue, we want to look at each aspect of how we foresee human resources changing in 2020.
Change in how HR is handled
Currently, most small to medium-sized logistics, warehousing, and transportation companies are not large enough to need a full, internal HR department. The various tasks are assigned to different managers, which means that sometimes up to four or five people are involved with the onboarding process. For example, one person would handle the payroll paperwork and another person would handle the training on specific job tasks while another person might handle training on internal procedures.
When dealing with a flood of applicants, such as when onboarding during a holiday rush, it is easy for details to fall through the cracks. An inefficient onboarding system can easily lead to problems later that require retraining and perhaps even losing recently hired employees.
We expect that this year, we will see more logistics companies re-examining their HR policies and procedures. This could mean anything from tightening up internal processes, to outsourcing HR procedures to a third party, to the largest of the regional companies choosing to create an internal HR department.
Demands will increase
We’re already seeing more stringent laws being placed on drivers—especially Over The Road, which does not include our drivers because we only make local and regional deliveries. We’re also already seeing companies make stricter demands on who is allowed to drive for them. For example, many of our clients require that no one who drives on their behalf have a criminal record of any kind. And just in recent days, it was announced that U-Haul will not hire smokers to drive for them in all the states that allow that hiring criteria.
We expect that companies will continue to develop higher expectations for those who work directly for them and those who represent them. This is both positive and negative. We know how valuable it is to have excellent people representing a company and we have professional standards required for anyone who works for us. However, reducing the pool of eligible drivers makes the driver shortage even more difficult to overcome.
Driver shortage will continue to be an issue
The driver shortage will continue to grow, especially in those companies that require drivers to be gone overnight. The younger generations are more interested in work/life balance than the extra money usually associated with long drives. We hope that as e-commerce companies work to build more regional warehouses, thus reducing drive time, that it will lead to more people being interested in becoming drivers.
Not only is the demand increasing, but the interest is decreasing. That said, logistics companies across the country are working to increase pay, benefits, and other perks to attract more drivers.
HR-related costs will continue to rise
As companies are becoming increasingly competitive in pay and other benefits, the overhead costs to their employers are naturally increasing. And as previously mentioned, the more people companies must hire, the more onboarding costs will continue to rise. We believe that if logistics companies do not get a better handle on their hiring and onboarding practices, it will also lead to more turnover. As any business owner knows, more turnover increases the costs and decreases morale. Both are profound HR-related issues that companies in our industry must get ahead of this year if they want to succeed.